Tuesday, July 24, 2007

Drug Purchasers Stated Wisconsin Antitrust Law Claim Against Bayer

This posting was written by Jeffrey May, editor of CCH Trade Regulation Reports.

A divided Wisconsin Supreme Court has ruled that a putative class of Wisconsin residents who purchased the branded antibiotic drug Cipro stated Wisconsin Antitrust Act claims against the drug's maker, Bayer AG, for maintaining a monopoly over the drug and for conspiring with generic drug makers to inflate prices by delaying generic competition. The majority rejected Bayer's argument that the challenged interstate conduct was outside the scope of the Wisconsin Antitrust Act. The majority took an expansive view of the range of conduct that Wisconsin residents can attack under the state antitrust law.

One of the dissenters said that he was “unable to discern from the discussion in the majority opinion any meaningful limitation on antitrust suits against activities outside this state . . .”

The suit was originally filed in state court in November 2000. In the last seven years, the case took a number of procedural twists and turns, ultimately landing in the state’s highest court.

The claims withstood a motion to dismiss, the court ruled, even though the circumstances involved interstate commerce and the challenged conduct occurred outside of Wisconsin, because they alleged that the challenged conduct substantially affected the people of Wisconsin and had impacts in the state. Their allegation that Bayer conspired with manufacturers of generic drugs to maintain monopoly prices on a best-selling prescription drug purchased by thousands of Wisconsin residents over several years met the "substantially affects" test of Olstad v. Microsoft Corp. (2005-2 Trade Cases ¶74,918), which "opened the door to interstate antitrust enforcement [under the Wisconsin Antitrust Act] in some circumstances."

The plaintiffs were required to allege that the conduct complained of had impacts in Wisconsin, and not merely nationwide impacts. However, the impacts of the challenged conduct on Wisconsin did not have to be distinguishable from or disproportionate to its impacts on other states. Neither the statute nor case law required that plaintiffs allege that the challenged conduct caused disproportionate injury to Wisconsin consumers, the court held.